Are you looking to apply for a mortgage or line of credit?
It’s important to learn about credit score to ensure you are eligible for the loan. Many people apply to multiple lenders to maximize their chances of approval, and little do they know it can do more harm than good. Why is that? Two words: credit inquiries. There are two types of credit inquiries: soft and hard credit inquiries. Let’s find out more!
Soft inquiries, also referred to as soft pulls, takes place when a credit card issuer or a company conducts a background check. It usually occurs when a credit card issuer that wants to offer a new credit card runs a credit check without your consent to whether you qualify or when an employer wants to see your financial standing.
Soft inquiries don’t represent any specific application for credit; hence they are only available to external parties who pull out a credit report and only made available for your eyes.
Hard inquiries, also referred to as hard pulls, takes place when a credit card issuer or a lender conducts a credit check when deciding on approval of your lending application. It may be related to a mortgage, line of credit, personal loan, or other credit that you applied for and authorized them to process.
Hard injuries can impact your credit score, but a single hard inquiry doesn’t result in a substantial difference. In many cases, you may see a reduction in a few points.
Key Differences Between Soft and Hard Inquiries
The biggest difference between soft and hard inquiries is that the former doesn’t affect your credit ratings. While some credit bureau may record a soft inquiry in your credit report, only you can watch them. On the other hand, hard inquiries do have an impact on your credit score and stay on your credit report for around two years.
While it’s not a bad thing, but too many hard inquiries in your credit report can increase your financial risk profile as you appear a high-risk application in front of lenders. It can make it difficult for you to secure financing, especially if your credit score isn’t up to the mark. Therefore, you should be mindful when applying for credit.
Are you looking for credit restoration services to improve your credit score and maximize your chances of loan approval? Hire a credit repair specialist of Masters Credit Consultants today! Our professional will help you achieve your financial goals. Call us at 1-844-620-8796 or email at firstname.lastname@example.org to find out more.
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